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Green Climate Fund (GCF)

We developed a methodology to track the co-finance and leverage effect of the Green Climate Fund

The Green Climate Fund (GCF) is a global financial mechanism established by the UNFCCC that invests in projects in developing countries that address climate change. One of the Fund’s key objectives is ‘leveraging’ as much additional climate investment as possible.

The GCF asked Steward Redqueen to develop a methodology to structurally assess how much additional financing it generates through its investments (i.e. their so-called ‘leverage effect’).

We conducted in-depth research that analysed the methodologies of different development and climate financiers and foundations. Based on the insights from our research, and the GCF practices to date, we developed a methodology that defined co-finance, leverage and all related aspects of climate finance for the GCF. We also developed a standard approach for the GCF to calculate leverage in assessing proposals, including a calculation tool. Finally, we trained key staff in applying the methodology.

The resulting methodology and tool enables the GCF to assess its leverage effect on an individual project and portfolio-wide basis. This enables the GCF to track progress towards its goal of mobilising USD 100Bn in climate finance for developing countries.